Indonesia-Canada will commemorate 70 years of bilateral relations in 2022. After seven decades, Jakarta-Ottawa still needs to improve relations and optimize the different potentials of the two geographically distant countries.

Indonesia’s Ambassador to Ottawa, Daniel Tumpal Simanjuntak, said Canada has been an important partner of Indonesia for a long time. Canadian business people recognize that Indonesia’s potential is growing. “Indonesia will become the fourth economic power,” he said during the webinar “Strengthening Canadian, Indonesian and ASEAN cooperation in the Indo-Pacific”, Friday (28/10/2022).

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In a number of interactions with the Indonesian Embassy in Ottawa, Canadian businessmen acknowledged that economic relations between Jakarta and Ottawa were not living up to the potential of the other. They see that the relations between Indonesia and Canada are still below the relations between the two countries with other countries. For this reason, one of the priorities of the Indonesian Embassy in Ottawa is to bring more state contractors known as the “White Giants of the North” to Indonesia.

Now, part of Canadian business in Indonesia is handled by representative offices of Canadian companies in other countries. In the future, it is hoped that Canadian businessmen and investors will increase their presence in Indonesia.

Indonesia’s main objective is to increase its position in the list of Canada’s trading partners. However, Indonesia has not yet entered the top 20 trading partners of Canada. The annual trade volume between Jakarta and Ottawa is still less than US$4 billion per year. In fact, Indonesia is the largest Canadian importer in the region. Indonesia is also the second largest direct investment destination in the region. In other words, Indonesia has not yet become a trading partner and the main destination for Canadian investment in Southeast Asia. “It is our priority duty,” Daniel said.

Indonesia also encourages Jakarta-Ottawa to form a task force to manage and accelerate strategic economic relations between the two countries. Indonesia has similar institutions with other countries. The working group coordinated by the ministry has made the solutions easier to find.

This suggestion is inseparable from the fact that relations between countries must be dynamic and that there are problems to be solved. Relations between countries should not be hampered by certain problems which have not found a solution.

Commercial agreement

Daniel said another priority for the Indonesian Embassy in Ottawa is to expedite negotiations on the Indonesia-Canada Comprehensive Partnership Agreement (CEPA). As of 2021, CEPA negotiations between the two countries have entered their second round. The conclusion of the agreement should improve economic relations between the two countries. The Indonesia-Canada CEPA will also be Indonesia’s first trade agreement with a North American country.

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While negotiating CEPA, Indonesia and Canada continue to strengthen cooperation in various fields. In October 2022, the Indonesian Ministry of BUMN and representatives of Canadian agricultural companies ratified a Memorandum of Understanding on the export of Canadian agricultural products to Indonesia. The contracts following the memorandum of understanding should materialize soon.

A number of Canadian businessmen are also exploring airport management in Indonesia. They offer environmentally friendly airport management. Indonesia also promotes the “Second Home” program to Canadian citizens. Launched some time ago, the program aims to attract professionals from different countries to live and work from Indonesia.

Indo-Pacific

Daniel said a number of countries have recognized Indonesia as an important player in the region and internationally. Various countries also recognize that the Indo-Pacific is increasingly important in global dynamics.

On the other hand, Canada’s relationship with Indonesia is increasingly framed within the framework of Canada’s relationship with the Indo-Pacific. “The economic relationship between Indonesia and Canada will provide a good foundation for Canada’s relationship with the Indo-Pacific,” Daniel said.

Like other countries, Canada is increasingly aware of the importance of the Indo-Pacific. In late September 2022, Canadian Foreign Minister Mélanie Joly said that Canada’s Indo-Pacific strategy would soon be announced. A number of former diplomats and various other parties have repeatedly urged Ottawa to immediately release a guide to Canada’s steps in the Indo-Pacific. This pressure cannot be separated from the fact that various countries and organizations in other countries have developed similar strategies.

ASEAN has released the ASEAN Indo-Pacific Outlook (AOIP). For Indonesia, AOIP emphasizes cooperation in the maritime sector, connecting regions and regions, economic cooperation and sustainable development.

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Indonesia hopes that its partners can connect with the region through one of these domains. “Whatever the name, create real cooperation in any of these areas,” Daniel said.

The Indo-Pacific expects concrete forms of interaction between countries outside the region. For the Indo-Pacific, one of the concrete manifestations of this interaction is economic cooperation.